Bailment
General
Property law
Part of the common law series
Acquisition
Gift Adverse possession Deed
Conquest Discovery Accession
Lost, mislaid, and abandoned property
Treasure trove Bailment License
Alienation
Estates in land
Allodial title Fee simple Fee tail
Life estate Defeasible estate
Future interest Concurrent estate
Leasehold estate Condominiums
Conveyancing
Bona fide purchaser
Torrens title Strata title
Estoppel by deed Quitclaim deed
Mortgage Equitable conversion
Action to quiet title Escheat
Future use control
Restraint on alienation
Rule against perpetuities
Rule in Shelley’s Case
Doctrine of worthier title
Nonpossessory interest
Easement Profit
Covenant running with the land
Equitable servitude
Related topics
Fixtures Waste Partition
Riparian water rights
Lateral and subjacent support
Assignment Nemo dat
Property and conflict of laws
Other common law areas
Contract law Tort law
Wills, trusts and estates
Criminal law Evidence
v d e
Bailment is distinguished from a contract of sale or a gift of property, as it only involves the transfer of possession and not its ownership. To create a bailment, the bailee must both intend to possess, and actually physically possess, the bailable chattel. Bailment is a typical common law concept and it is non-existent in civil law.
In addition, unlike a lease or rental, where ownership remains with the leasor but the lessee is allowed to use the property, the bailee is generally not entitled to the use of the property while it is in his possession. Moreover, unlike a security agreement or pawn at a pawnbroker, where the secured party is entitled to the possession and use of the property only on default of payment, a bailor can demand the return of the property at any reasonable time, without prior notice. A common example of bailment is leaving your car with a valet. Leaving your car in a parking garage is typically a license, as the car park’s intent to possess your car cannot be shown. However, it arises in many other situations, including terminated leases of property, warehousing (including store-it-yourself) or in carriage of goods.
Liability
No matter how a bailment arises, the bailee will incur some liability in the taking of a bailment. Different jurisdictions maintain different standards of care.
Strict liability
The old common law held a bailee strictly liable for the bailment. The exception to this rule was the case of involuntary bailments (see below), when the bailee is only held to a standard of due care.
Tiered system
In many Jurisdictions, including California, the system of strict liability has been replaced by a tiered system of liability that depends on the relationship of the bailee to the bailor. The bailee is generally expected to take reasonable precautions to safeguard the property, although this standard sometimes varies depending upon who benefits from the bailment.
If both bailor and bailee are found to benefit from the relationship, such as sending a package, then the bailee is held to a standard of ordinary, or reasonable, care.
If the bailment is to the primary benefit of the bailor, such as finding a lost wallet, the bailee must be found grossly negligent to be liable for damage done to the bailment.
If the bailee primarily benefits, such as if you borrow your neighbor’s rake to clean your lawn, the bailee must exercise highest care, i.e. is liable for any damages arising from slight neligence.
Normal care
Some jurisdictions have held bailees to a standard of normal care regardless of who benefits in the bailor/bailee relationship.
Involuntary bailees
An exception to all the above is the case of an involuntary bailee, one who by not intentional acts is made a bailee. For example, if one is given a stock certificate but it turns out to be the wrong certificate (intended for someone else), he is an unintentional bailee, he has made not intentional act to become a bailee. He is therefore entitled to divest himself of the certificate regardless of a duty of care, so long as he does not malicious or intentional harm to another.
Damages
Plaintiffs will be able to sue for damages based on the duty of care. Often this will be normal tort damages. Plaintiff may elect also to sue for conversion, either in the replevin or trover, although these are generally considered older, common law damages.
Terms
Bailment can arise in a number of situations, and is often described by the type of relationship that gave rise to the bailment. Several common distinctions are:
Voluntary vs. Involuntary. In a voluntary bailment, the bailee agrees to accept responsibility for possession of the goods. In an involuntary bailment, the bailee has possession of the goods without intent to do so. A common situation that creates voluntary bailment is when a person leaves goods with someone for service (e.g., dry cleaning, pet grooming, car tune-up). The bailee must hold the goods safe for the bailor to reclaim within a reasonable time. An involuntary (or constructive) bailment occurs when a person comes into possession of property accidentally or mistakenly, as where a lost purse or car keys are found and need to be protected until properly redelivered a bailment is implied by law.
For consideration vs. gratuitous. If a person agrees to accept a fee or other good consideration for holding possession of goods, they are generally held to a higher standard of care than a person who is doing so without being paid (or receives no benefit). Consider a paid coat-check counter versus a free coat-hook by the front door, and the respective obligations of the bailee. Some establishments even post signs to the effect that “no bailment” is created by leaving your personal possessions in their care, but local laws may prevent unfair enforcement of such terms (especially attended car parks).
Fixed term vs. indefinite term. A bailor who leaves property for a fixed term may be deemed to have abandoned the property if it is not removed at the end of the term, or it may convert to an involuntary bailment for a reasonable time (e.g., abandoned property in a bank safe, eventually escheats to the state, and the treasurer may hold it for some period, awaiting the owner). However, if there is no clear term of bailment agreed upon, the goods cannot be considered abandoned unless the bailee is given notice that the bailor wishes to give up possession of the goods. Frequently, in the case of storage of goods, the bailee also acquires a contractual or statutory right to dispose of the goods to satisfy overdue rent; a lawful conversion of bailed goods.
Cases
Coggs v Bernard (1703)
See also
Wikisource has the text of the 1911 Encyclopdia Britannica article Bailment.
Bail
Trover
Replevin
Categories: Personal property law
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